Sunday E-dition: Retired Judge Brings Real Napa Valley Crimes to Life

By Sasha Paulsen

NAPA VALLEY, Calif. — Retired Napa Superior Court Judge Ray Guadagni has a way of telling a crime story that drops a reader onto the bench alongside him to watch action in a courtroom unfold as he rolls out in meticulous detail tales of the darker side of our seemingly peaceful little valley.

Guadagni’s first book, “The Adventures of the Squeezebox Kid,” (2016) was lighthearted and innocent, a memoir of growing up in Napa in the postwar years. It was after this that he turned to crime with “The Napa Murder of Anita Fagiani Andrews: A Cold Case That Caught a Serial Killer” (2021). This book chronicles the 1973 murder of a Napa woman that remained unsolved for 37 years, haunting Napa and shuttering the bar where it occurred until DNA provided a clue that led to the trial and conviction of a man already in prison.

"Your crimes appear to have touched an entire community in a way that crimes of violence seldom do. On one hand, we’re only talking about money. But on the other hand, lives have been fundamentally changed by your behavior." – Judge Stephen Mock

He followed that book with “Napa Valley Case Files: Justice in Wine Country” (2022), a riveting collection of both historic and more recent “crimes perpetrated in the name of greed, love and rage,” the subsequent investigations and trials.

“What are you going to write next?” I asked him after reading “Case Files.”

“I am thinking of writing about LendVest,” he replied. “Have you heard of it?”

I had not.

Now, two years later, he has delivered “The Napa Valley LendVest Fraud Scandal” (The History Press).

Like the Andrews case, the LendVest story takes place within the lifetime of many of us, and in the most compelling parts of his new book, Guadagni recounts interviews with people who lived through the 1980s scandal that robbed hundreds of Napa residents and left lives devastated.

Some accounts are derived from their testimony at the trial of David Hanson, a personable family man, a neighbor whom many had met at their church and who charmed and talked them into investing their money in a Ponzi scheme, his LendVest Mortgage company. Others are memories of people who worked for LendVest who remember their parents and grandparents losing their life savings and people who investigated Hanson’s crimes, described by attorneys as the largest securities trust fraud case in Napa County history.

By the time the story concludes, it reaches as far as the Kremlin and involves spies, hardened criminals, escapees from prison and a KGB plot. Yet its roots are in the peaceful vistas of Napa.

Guadagni’s story starts at sea with a tugboat, Intrepid Venture, towing a barge into the San Francisco Bay on May 24, 1988. It was stopped there by the Coast Guard and raided by U.S. Customs agents, who uncover 45 tons of hashish and marijuana valued at $189 million and described as “by far the largest seizure the U.S. Customs Service has ever made.”

Five men were arrested: the captain, his son, stepson and two nephews. The captain was Calvin Robinson, a Napa High School graduate who had served 19 years in prison and, now released, had reportedly given up a life of crime to run a business, Dredge Masters Associates. The address of the business was on Olive Hill Lane, a quiet country road in east Napa, the home of his sister, Sue Robinson Lemmons, and her husband, Donald, who was president and corporate director of LendVest Mortgage Inc. 

IRS agents and other federal investigators joined a search of the home, where they seized $260,000 in cash, some of it stashed in a laundry basket, and began to unravel an elaborate money-laundering scheme in which they believed drug-smuggling profits had been funneled to LendVest.

As news broke of the arrests of the Lemmons’ and Robinson’s other sister, Diana Robinson Rauch, investors in LendVest attempting to withdraw their money found that this was impossible: LendVest was bankrupt, and their investments, often life savings, were gone.

“When LendVest declared bankruptcy in spring of 1988,” Guadagni writes, “the company owed its investors $7.9 million.”

Napa Valley Features Graphic

How did it all happen? Guadagni recounts revelation after revelation that followed in a new investigation that centered around Hanson, the founder of LendVest.

“Hanson was seen as an upstanding citizen, an active member of Napa First Baptist Church who held prayer meetings at his mortgage company and described himself as a ‘good Christian person,’” Guadagni writes.

When Hanson founded LendVest in the early 1980s, many people who knew him invested with the man they trusted and who promised 12% to 13% returns at a time when banks were paying around 5%.

Guadagni untangles the complex, unfolding scandal as investors learned the truth about the man who had persuaded them to hand over their savings, promising that their investments were secure when they were not and inducing them to sign over a power of attorney to him so he could “manage their money.” He was, in reality, redirecting their money to other personal investments, one of which was the Joseph Mathews Winery in Napa. Investors were also funding Hanson’s increasingly lavish lifestyle.

“In 1983-83, because of Hanson’s extravagant lifestyle, LendVest began to lose money at a rapid rate,” Guadagni notes. When his accountant, Harvey Grant, alerted Hanson that the 1983-84 financial statement showed a negative net worth, Hanson asked Grant to prepare a fictitious financial statement showing a profitable operation in compliance with all the government and banking requirements.

“At first Grant did not want to prepare such a statement. He had known Hanson for many years and believed him to be a good Christian who meant well, but when he examined the LendVest books, he saw that Hanson was deceiving people. He believed, however, that Hanson intended to make things right with his clients and employees and that in time he would again be successful.

Hanson was confident, charming and persuasive. He exuded honesty. Grant reluctantly agreed to prepare the statement.”

Grant continued to prepare the false statements until LendVest collapsed. Asked later why he had done it, he replied simply, “I don’t know.” He subsequently turned state’s evidence.

Hanson had already been convicted of money-laundering when he went to trial for the LendVest crimes, charged with 139 counts of fraud, embezzlement and burglary. In part, he defended himself by charging that the government was at fault when they seized the cash from the Lemmons’ home, which, he said, sent LendVest into bankruptcy. Likewise, Robinson, the captain of the “Drug Tug,” who claimed he had no idea what his cargo was, attempted to fault the law and the lawmen for the predicament in which they caught him.

It didn’t work for either. In Hanson’s case, his defense came up against the testimony of the many people — 200 gave depositions — whom he had robbed.

“These stories are gut-wrenching,” investigator Ed Wynn said. “We had victims approaching their 80s; some of these elderly people had to go back to work for the rest of their lives.”

At Hanson’s sentencing, Judge Stephen Mock told him, “Your crimes appear to have touched an entire community in a way that crimes of violence seldom do. On one hand, we’re only talking about money. But on the other hand, lives have been fundamentally changed by your behavior.”

In a fascinating afterword, Guadagni recounts how, in attempting to understand where the initial money came from for the drug-smuggling operation, he talked to Norman Wood, a federal agent who investigated the case.

“This was the most complex case I had ever been involved with,” Wood said. “The players involved went from local individuals from Napa to the Russian military who controlled Afghanistan and all the way to the KGB in the Kremlin. The goal of this operation was to remove Mikhail Gorbachev from power in 1989. To do this they needed money, $100 million. To get the money they were going to smuggle 100 tons of Afghan hashish into San Francisco.”

They devised a plan with a convicted spy for Russia, Christopher Boyce, who had escaped from Lompoc prison. Boyce’s roommate at Lompoc was Robinson from Napa.

“They devised an ingenious plan that was foolproof,” Wood said. “Almost.”

And thereby brought down Hanson’s house of cards in Napa.

What is the next project for Napa’s judge-turned-author?

“I am thinking of writing fiction,” Guadagni said. “A mystery.”

Ray Guadagni will give an author talk at the Napa County Library on Tuesday, July 16, at 6 p.m. The event is sponsored by Napa Bookmine, and required reservations can be made here.

Ray Guadagni - Submitted Photo

If today’s story captured your interest, explore these related articles:

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• Sunday E-dition: When did we stop being ‘nice’?

• WineaPAWlooza event raises $1.5 million for Jameson Humane

• Disasters impact pets: Jameson Humane to host WineaPAWlooza fundraiser

• Beckstoffers Honored as Jameson Humane’s Pet Pantry Reopens

• David Stevens: A trailblazer in Napa Valley's wine culture and champion of animal welfare

• Monica Stevens’ Studio 1299A fuses luxury wine with social good

Sasha Paulsen is a Napa Valley-based novelist and journalist.

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Levity Corner

Caption contest: Pick your favorite caption or add your own in the comments below.

Last week’s winner

The winning caption, from last week’s contest, in “Sunday E-dition: Jameson Humane’s WineaPAWlooza Raises $1.1 Million for Animals,” with 56% of the votes was, "Remember when we used to be worried about frost?"

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Last Week

Last week, Dave Stoneberg reported on the WineaPAWlooza auction at Napa’s Burgess Cellars, which raised $1.1 million for Jameson Humane, a no-kill rescue and sanctuary for homeless animals. Auctioneer Fritz Hatton helped sell a variety of high-value lots, including a $145,000 tour and dinner package, contributing to the event’s success. Muralist Amy Burkman was also featured, completing and auctioning a painting in under seven minutes for $7,000. The two-day event included a grand tasting from 60 Napa and Sonoma vintners and concluded with a concert by the local rock band Wristrocket.

Napa Valley Features reported that the Toll Fire in Napa County, which ignited northeast of Calistoga on July 2, burned 50 acres and prompted evacuation orders for several zones. Cal Fire Sonoma-Lake-Napa Unit managed the fire, deploying 300 personnel, three helicopters, 20 engines, two dozers, seven water tenders and four crews to combat the blaze. Evacuation orders affected approximately 114 residents, though Calistoga itself was not under evacuation. Road closures included Old Lawley Toll Road, and updates were available through Cal Fire's webpage and evacuation maps. As of July 5, the fire was 60% contained and evacuation orders were lifted.

Last week, Tim Carl explored the shifting landscape of Napa Valley's wine industry in "Under the Hood: Navigating the Future of the Napa Valley Model." Carl noted that despite the region's historical success and reputation, recent years have seen declines in sales, labor shortages and evolving consumer preferences. He traced the rise of the "Napa Valley Model" from the late 1800s to its peak in the late 2010s, fueled by investment and tourism booms. Carl highlighted eight factors contributing to the current challenges, emphasizing the need for the community to adapt and find a sustainable path forward.

“Rupert” by Kathleen Scavone

Dan Berger discussed the nostalgic yet often impractical experience of barrel tastings in "The Nostalgia and Nonsense of Barrel Tastings." Reflecting on his experiences from the 1970s and 1980s, Berger explained that while winemakers can glean insights from these early tastings, most visitors find them more theatrical than educational. He noted that modern, more sanitized tasting sessions offer a better environment for appreciating young wines. Berger also touched on the rumored "Porker Barrel" phenomenon and the speculative nature of pre-release wine evaluations.

Penny Pawl shared her experiences and methods for plant propagation in "Multiply Your Plants With Propagation." Pawl detailed techniques like vegetative propagation, root cuttings, and air layering, emphasizing practical steps and personal successes. She also discussed the use of cloners for rapid rooting and the joy of sharing propagated plants with friends. Throughout the article, Pawl highlighted the ease and satisfaction of home propagation, encouraging readers to try these methods themselves.

John Dunbar shared how four friends—Mason Garrity, Benjamin Martinez, Andrew Mazotti, and Charlie Wagner—launched Napa Valley Car Club in 2023 to offer visitors a unique way to explore Wine Country in exotic cars. Their fleet includes Ferraris, Lamborghinis, Aston Martins, Bentleys and McLarens. The club leases space in Napa's Oxbow District and plans to introduce a membership program and host car shows. Clients can rent these high-performance cars for day-long road trips, enhancing their Napa Valley experience. The partners also contribute to local charities by donating car club experiences

Next Week

Next week we have more interesting articles from a host of Napa Valley Features' contributors. The Master Gardener series on Wednesday will provide gardening insights, while Dan Berger will focus on wine topics on Thursday. Carl will delve into the status of "auction culture" in the Napa Valley, and a new contributor will discuss the challenges and need for young people to enter journalism.